Bipartisan Negotiators Drop Stronger Tax Enforcement from Infrastructure Bill Pay-fors

Funding issues stall talks on physical infrastructure measure

By Jim Wiesemeyer

Updated July 19, 2021 04:59 AM

Funding issues stall talks on physical infrastructure measure

Washington Focus

Is Wednesday a key day or will the arbitrary spending timelines be extended? Senate Majority Leader Chuck Schumer (D-N.Y.) said Thursday that he intends to hold a vote to begin debate on the bipartisan infrastructure framework on Wednesday. While a group of bipartisan senators agreed to the plan generally a few weeks ago, no legislative text has been released yet on either infrastructure measure. Wednesday is also the deadline Schumer has set for Senate Democrats to determine the final terms of their budget package, which currently has a topline price tag of $3.5 trillion. Republicans and Democrats were still working on details over the weekend and said they weren’t sure if they would meet the midweek deadline.

IRS pay-for heave ho in one of the infrastructure bills. Republican senators working to negotiate a bipartisan $1.2 trillion bipartisan infrastructure bill are ditching plans to strengthen enforcement at the Internal Revenue Service to pay for the legislation, Sen. Rob Portman (R-Ohio) said Sunday. The proposal to amplify IRS enforcement to raise new revenues was not supported by his fellow conservative colleagues, Portman told CNN, indicating that negotiators will have to find new ways to pay for the bill. “Well, one reason it’s not part of the proposal is that we did have pushback. Another reason is that we found out that the Democrats were going to put a proposal into the reconciliation package, which was not just similar to the one we had but with a lot more IRS enforcement,” he said. The draft for the proposal suggested an additional $100 billion could be collected by the IRS over the next decade by increasing enforcement to ensure the government is accurately collecting taxpayer portions. Sen. Bill Cassidy (R-La.) said on Fox News Sunday that meeting the Wednesday deadline was possible, but only if the negotiators agreed on provisions to pay for the plan. “We need Senate leadership, Schumer, and the White House to work with us. Right now, I can — I can frankly tell you that they’ve not,” Cassidy said. Among other options, lawmakers are considering delaying or repealing a Trump-era proposal to end rebates that drugmakers give to Medicare, a change that would save the government revenue.

On Monday, Treasury Secretary Janet Yellen will call a meeting of the President’s Working Group on Financial Markets, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. to talk about how to regulate the digital currency known as stablecoins, the Treasury Department said Friday. Federal Reserve Chair Jerome Powell said that stablecoins, which are pegged to the U.S. dollar, need a strong regulatory framework if they are going to be “a significant part of the payments universe.” The meeting is the start of a process that will result in “written recommendations in the coming months,” Treasury said.

Hearings and Events This Week

Budget-related hearings continue to be the focus in Congress while President Biden hosts King Abdullah II of Jordan, Queen Rania and Crown Prince Al Hussein bin Abdullah II of Jordan to the White House and will deliver remarks on the U.S. recovery.

Monday, July 19

Presidential panel to discuss risks of stablecoins. Treasury Secretary Janet Yellen will hold a meeting of top regulators to assess digital currencies that are pegged to national currencies like the U.S. dollar. Such assets are increasingly seen as a potential danger not just to crypto markets, but to the capital markets as well.
President Joe Biden hosts King Abdullah II of Jordan, Queen Rania and Crown Prince Al Hussein bin Abdullah II of Jordan to the White House and will deliver remarks on the U.S. recovery.
Supply chain issues. Business Council for International Understanding virtual discussion closed to the press on “the Biden-Harris Administration’s policy priorities regarding supply chains.”
Transportation issues and supply chains. Department of Transportation’s Federal Motor Carrier Safety Administration teleconference of the Motor Carrier Safety Advisory Committee, including considering information on supply chains for the transportation industrial base.
COVID vaccines. Washington Post Live virtual discussion on “where we are in the pandemic — from vaccines and variants to therapeutics and treating long-haul symptoms.”
CDC pandemic response. Business Council for International Understanding virtual discussion closed to the press on “the CDC’s ongoing response to the Covid-19 pandemic, progress made towards HIV/AIDS goals and the emerging threat in antimicrobial resistance.”
CFPB anniversary. Federalist Society for Law and Public Policy Studies virtual forum on “The CFPB (Consumer Financial Protection Bureau) Turns 10: Evaluating America’s Youngest Federal Financial Regulator.”
Media and telecom issues. The Multicultural Media, Telecom and Internet Council virtual 2021 Former FCC Chairs Symposium focusing on “media and telecom diversity and closing the digital divide.”

Tuesday, July 20

Jeff Bezos counts down to launch. The billionaire and three other people are set to ride a Blue Origin rocket to the edge of space.
Transportation Secretary Pete Buttigieg talks at The Economic Club of Washington, D.C.
Ransomware. House Energy and Commerce Oversight and Investigations Subcommittee hearing on “Stopping Digital Thieves: The Growing Threat of Ransomware.”
Bipartisan infrastructure plan. The Economic Club of Washington, DC virtual discussion on “congressional and White House negotiations regarding the $1.2 trillion Bipartisan Infrastructure Framework and how the new funding would address existing issues in the U.S. transportation and digital infrastructure.”
Transatlantic trade agenda and China. House Foreign Affairs Europe, Energy, the Environment and Cyber Subcommittee hearing on “The New Transatlantic Trade Agenda: China, Climate, and Covid-19.”
Increased summer travel. House Homeland Security Transportation and Maritime Security Subcommittee hearing on “Taking to the Skies: Examining TSA’s (Transportation Security Administration) Strategy for Addressing Increased Summer Travel.”
Federal Covid response. Senate Health, Education, Labor and Pensions Committee hearing on “The Path Forward: A Federal Perspective on the Covid-19 Response,” with Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases; Rochelle Walensky, director of the Centers for Disease Control and Prevention; and Janet Woodcock, acting commissioner of the Food and Drug Administration.
Cuba situation. House Foreign Affairs Western Hemisphere, Civilian Security, Migration, and International Economic Policy Subcommittee hearing on “The Crackdown on Artists and Free Expression in Cuba.”
Housing issues. House Financial Services Committee hearing on “Building Back a Better, More Equitable Housing Infrastructure for America: Oversight of the Department of Housing and Urban Development.”
U.S. Supreme Court. General Services Administration teleconference of the Presidential Commission on the Supreme Court of the United States.
Small business cybersecurity. House Small Business Committee hearing on “Strengthening the Cybersecurity Posture of America’s Small Business Community.”
FY 2022 budget: Defense. House Armed Services Committee hearing on “Non-Governmental Views on the FY 2022 Department of Defense Budget.”
Communities and climate change. Senate Banking, Housing and Urban Affairs Committee hearing on “21st Century Communities: Climate Change, Resilience, and Reinsurance.”
Climate and cooperation. Center for Strategic and International Studies virtual discussion on “Climate Cooperation and Competition: Leveraging Sustainable Development Goal 13.”
Financial market compliance. Securities Industry and Financial Markets Association virtual compliance and legal forum, including Securities and Exchange Commission Commissioner Elad Roisman participating in a discussion.
Iran issues. National Council on U.S.-Arab Relations virtual discussion on a new report, “Iran and U.S. strategy: Looking Beyond the Joint Comprehensive Plan of Action (JCPOA).”
State Department nominees. Senate Foreign Relations Committee hearing on several nominees to State Department posts or ambassadorships.
Covid response. Federal Emergency Management Agency teleconference of the Clean Air Act Advisory Committee on voluntary agreements and plans of action with representatives of industry, business, and others to help provide for the national defense and facilitate voluntary agreements with respect to responding to the spread of Covid-19.
Aviation workforce. House Transportation and Infrastructure Aviation Subcommittee hearing on “Bridging the Gap: Improving Diversity and Inclusion in the U.S. Aviation Workforce.”
Covid vaccines. U.S. News & World Report virtual forum on “Covid-19: Achieving Vaccine Equity and Overcoming Vaccine Hesitancy.”
Welfare reform. House Ways and Means Committee Republicans virtual discussion on “Building on Welfare Reform’s Success in Lifting Americans Out of Poverty — Rather Than Move Backward.”
U.S. foreign policy. Atlantic Council virtual discussion on “lessons for U.S. foreign policy.”
Zero-emission trucks. The Hill virtual discussion on “The Road to Zero-Emission Trucks: Manufacturing.”
U.S./China issues. House Foreign Affairs Asia, the Pacific, Central Asia and Nonproliferation Subcommittee and Europe, Energy, the Environment and Cyber Subcommittee joint hearing on “U.S.-European Cooperation on China and the Broader Indo-Pacific.”
ESG investing. Brookings Institution online event to discuss “What role should the SEC play in ESG (environmental social governance) investing?”
Civilian climate corps. House Natural Resources National Parks, Forests, and Public Lands Subcommittee hearing on “Examining the Potential for a Civilian Climate Corps.”

Wednesday, July 21

Immigrant farm workers. Senate Judiciary Committee hearing on immigrant farmworkers and feeding America.
Wood products. House Agriculture Conservation and Forestry Subcommittee hearing on “The U.S. Wood Products Industry: Facilitating the Post Covid-19 Recovery.”
Forced labor issues. House Ways and Means Trade Subcommittee hearing on “The Global Challenge of Forced Labor in Supply Chains: Strengthening Enforcement and Protecting Workers.”
Current heatwave. House Science, Space and Technology Environment Subcommittee hearing on “Silent Killer: The Rising Problem of Extreme Heat in the U.S.”
Cybersecurity and infrastructure. Senate Environment and Public Works Committee hearing on “Addressing Cybersecurity Vulnerabilities Facing Our Nation’s Physical Infrastructure.”
Trade and the pandemic recovery. Peterson Institute for International Economics virtual discussion on “How Trade Can Support Post-Pandemic Recovery.”
Access to the financial system. House Financial Services Consumer Protection and Financial Institutions Subcommittee hearing on “Banking the Unbanked: Exploring Private and Public Efforts to Expand Access to the Financial System.”
SBA and climate. House Small Business Oversight, Investigations and Regulations Subcommittee hearing on “SBA’s Role in Climate Solutions.”
FY 2022 budget: NOAA, USFW, USGS. House Natural Resources Water, Oceans and Wildlife Subcommittee hearing on “Examining the President’s FY 2022 Budget Proposal for the U.S. Bureau of Reclamation, U.S. Geological Survey, U.S. Fish and Wildlife Service, and National Oceanic and Atmospheric Administration.
Environmental justice. House Oversight and Reform Committee hearing on “Building Back with Justice: Environmental Justice Is Central to the American Jobs Plan.”
Futures market issues. American Bar Association’s Derivatives and Futures Law Committee virtual Mid-Year Program including keynote remarks from SEC Chair Gary Gensler.
FY 2022 budget: U.S. Coast Guard. House Transportation and Infrastructure Coast Guard and Maritime Transportation Subcommittee hearing on “Review of FY 2022 Budget for the Coast Guard and Maritime Transportation Programs.”
U.S. policy in Turkey. Senate Foreign Relations Committee hearing on “U.S. Policy on Turkey.”
Industrial cybersecurity. Hudson Institute virtual discussion on “The Future of Industrial Cybersecurity.”
Labor and trade. Washington International Trade Association virtual discussion on trade policy, focusing on “labor, sustainability, and other domestic and global concerns.”
Broadband. National Telecommunications and Information Administration holds the “Practical Broadband Conversations” series of webinars on a monthly basis to engage the public and stakeholders with information to accelerate broadband connectivity, improve digital inclusion, strengthen policies and support local priorities.
Bond rating agencies. House Financial Services Investor Protection, Entrepreneurship, and Capital Markets Subcommittee hearing on “Bond Rating Agencies: Examining the ‘National Recognized’ Statistical Rating Organizations.
Climate change and east Asia. Senate Foreign Relations East Asia, the Pacific and International Cybersecurity Policy Subcommittee hearing on “Combatting Climate Change in East Asia and the Pacific.”
Civilian Conservation Corps. Atlantic Council virtual discussion on “Reimagining the Civilian Conservation Corps.”

Thursday, July 22

U.S., China and Taiwan. George Washington University East Asia National Resource Center virtual discussion on “Unbalanced Triangular Relations? Assessing U.S.-China-Taiwan Ties After the Chinese Communist Party (CCP) 100th Anniversary.”
Electricity markets. American Enterprise Institute for Public Policy Research (virtual discussion on “Efficient Organization of Electricity Markets: Costs, Reliability, and Cross-Subsidies.”
Pandemic risk frameworks. Senate Banking, Housing and Urban Affairs Securities, Insurance, and Investment Subcommittee on “Examining Frameworks to Address Future Pandemic Risk.”
U.S.-Korea relations. Center for Strategic and International Studies virtual discussion on U.S.-Korean relations.
Right to organize. Senate Health, Education, Labor and Pensions Committee hearing on “The Right to Organize: Empowering American Workers in a 21st Century Economy.”
Transatlantic alliance. McCain Institute virtual discussion on “The Transatlantic Alliance.”
Global Covid vaccines. Boston University’s Center for Emerging Infectious Diseases Policy and Research virtual discussion on “Global Vaccine Access: Insights from International Public Health Experts on Ensuring an Equitable Pandemic Recovery.”
Ransomware and infrastructure. New America virtual discussion on “Ransomware Summer: Cybersecurity as Critical Infrastructure.”
US, Russia and cybersecurity. Atlantic Council virtual discussion on “Russia, Cybercrime, and a new Phase in U.S.-Russian Cybersecurity.”
Immigration and economic growth. U.S. Chamber of Commerce virtual discussion on “Putting Communities First: How Immigration Reform Will Drive Economic Growth.”

Friday, July 23

Tokyo Olympics begins after a year of setbacks. The delayed 2020 Games officially kick off with Friday’s opening ceremony. Two athletes staying at Tokyo’s Olympic Village tested positive for Covid-19, the first confirmed cases among Olympians staying at the complex.
Transatlantic data flows. Brookings Institution virtual discussion on “Transatlantic Data Flows: What’s Next After the EU-U.S. Privacy Shield?”
Maritime meeting prep. State Department teleconference to prepare for the 108th session of the International Maritime Organization’s Legal Committee (LEG 108) to be held remotely July 26-30, 2021.
China Communist Party anniversary. Woodrow Wilson Center’s Kissinger Institute on China and the United States virtual discussion on “The Selling of a Centennial, 2021: What the Chinese Communist Party’s (CCP) Propaganda Reveals About the CCP.”

Economic Reports for the Week

The Federal Reserve on Saturday began its quiet period before its policy-setting committee’s July 27-28 meeting.

Monday, July 19

National Association of Home Builders releases its NAHB/Wells Fargo Housing Market Index for July. Consensus estimate is for an 82 reading, slightly higher than the June data. Home builders remain quite bullish on the housing market, but the June figure was the lowest since August 2020, amid rising materials prices and supply-chain shortages.

Tuesday, July 20

Census Bureau reports new residential construction data for June. Economists forecast a seasonally adjusted annual rate of 1.6 million housing starts, slightly more than the June figure.

Wednesday, July 21

MBA Mortgage Applications

Thursday, July 22

Jobless Claims
NAR reports existing-home sales for June. Economists forecast a seasonally adjusted annual rate of 5.8 million, matching the May figure. Existing-home sales have declined for four consecutive months.
Fed Balance Sheet
Money Supply
Conference Board releases its Leading Economic Index for June. Consensus estimate is for a 1.1% month-over-month increase, after a 1.3% rise in May. The LEI has now surpassed its previous peak from January 2020.
Chicago Fed National Activity Index
KC Fed Manufacturing
European Central Bank announces its monetary-policy decision. The central bank is widely expected to keep its key short-term interest rate unchanged at negative 0.5%. The ECB recently changed its inflation goal to 2% over the medium term instead of targeting inflation of close to, but below, 2%.

Friday, July 23

PMP Composite Flash

Key USDA & international Ag & Energy Reports and Events

USDA on Friday issues its latest food price update.

Monday, July 19

Ag reports and events:

Export Inspections
Crop Progress
Fruit and Tree Nut Data
Vegetables and Pulses Data